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Boston Beer’s revised marketing spend for the year is “primarily” related to Truly hard seltzer as recent investments proved ineffective, execs detailed during Q2 earnings call yesterday evening. “The investments we made in new brand creative and soccer-related promotions have improved our marketplace presence, particularly in display activity,” but “the impact on consumer demand has not yet met our expectations,” founder, chairman and ceo Jim Koch allowed. “The cuts that we made were to the low-performing media, the ones where we just weren’t seeing any significant sales response….So it was almost $20 million we cut, but it was almost all from basically nonperforming advertising.” Co’s “adjusting the level and timing of our investments in Truly as we re-assess the most effective approach to accelerating brand performance.” That’s mostly expected to impact advertising levels in the 4th qtr, cfo Diego Reynoso added. Boston’s ad, selling and promo spend was up ~10% to $326 mil thru 1st half, and at low-end of its revised guidance, spend would hafta slip 9%, ~$29 mil to $284 mil in the 2d half of 2026 vs yr ago. Truly hard seltzer $$ and volume declined more than 20% for the last 4 wks thru Jul 12 in Circana multi-outlet + convenience channels, dragging sales down 16-17% year-to-date. While wild berry flavor and higher-ABV Truly Unruly line “continue to significantly outperform other styles,” including Truly Unruly fam up for the year, its slew of variety packs are each down varying degrees of double-digits, with biggest drags still comin’ from Lemonade, Berry, Seasonal and Punch mix packs.Twisted Tea + Sun Cruiser STRs Still Collectively Up Despite Tuffer Twisted Trends; 12pks Impacted Most Truly remains the biggest drag to Boston’s biz overall. But gotta factor in the ways Sun Cruiser vodka tea’s growth directly offsets Twisted Tea’s dip. Twisted Tea and Sun Cruiser are still collectively growing volume “very slightly” with revenue growing faster YTD thru mid Jul, Jim shared. That’s even as Twisted Tea sales sequentially softened since the beginning of the year in tracked channels, offset by Sun Cruiser’s triple-digit growth, including nearly triple-digits for the last 13 wks. Sun Cruiser’s “revenue and margin accretive for us,” selling at “closer to 30%” higher revenue/case, Jim noted, and still has plenty of distribution and brand awareness upside in co’s view.Yet Twisted Tea “is facing volume and share pressures with lower velocities,” he acknowledged, chalking that up to “FMB category headwinds, reduced feature and display activity primarily due to the expansion of RTD spirits,” and “interaction” with spirits-based hard teas. Interestingly, Twisted Tea’s “largest volume headwind” is in 12pks, which are impacted most by reduced display activity and shifts in consumer behavior, Jim explained. Twisted single-serves, lower-sugar Twisted Tea Light and higher-ABV Twisted Extreme “each grew share” of FMBs, including both Extreme and Light volume growth and singles “pretty close to flat.” So co’s “taking a disciplined test-and-learn approach to revenue management on the brand including targeting pricing adjustments and smaller pack size offerings,” still in “early stages,” while continuing to invest heavily in the brand. Notably, co had “some success” fixing Twisted’s price point in mkts “where it really just got way higher than it should…way above what the brand has historically commanded,” with 12pks more expensive than Stella 12pks, he used as an example. Next yr, 12pk price increases “probably will be very modest.”Boston continues to boost Sun Cruiser marketing presence too, looking to build on brand’s position as the #5 spirits RTD and “the leading” RTD spirits tea & lemonade on-prem. Co anticipates “strong distribution gains” and “continued strong growth” on Sun Cruiser for the rest of 2026, complemented by its “Let the Good Times Cruise” media campaign across TV, paid social and digital ads, including PGA, MLB, and “numerous concert series,” plus activations with influencers like “outdoor enthusiast” Dylan Efron. Importantly, Boston is “committed to keeping a disciplined level of tea and lemonade styles as we continue to grow our volume,” Jim underlined. There’s still “long-term expansion” oppys. While distribution growth isn’t as big an oppy in 2027 as it was this year, Jim “would certainly anticipate well into the double digits” for distribution growth next year. Altogether, co’s hoping to keep fueling the fire on Sun Cruiser while also “anticipat[ing]” Twisted Tea trends will improve as Sun Cruiser and Surfside “slow down.”“Strong” On-Prem Results “Across the Portfolio” & Industry for World Cup Offset by Softer Off-Prem While Boston Beer depletions softened in Q2, co saw “strong on-premise results across the portfolio,” driven by “major events” like World Cup and America’s 250th. In Boston, “we saw tremendous numbers,” around 30% increase vs yr ago during the World Cup stretch, Jim shared. It’s not just Sun Cruiser’s “strong presence” on-prem. But on-prem is just 12% of our biz, he noted. And lookin’ at the 11 major metro mkts that hosted World Cup matches, those make up “maybe 30% of the U.S. volume” in total, with just a fraction of total biz happening on-prem during a 6-wk stretch that equates to about 1/8 of the year, per Jim’s quick math. Net-net, that’s “less than 0.5% of the annual business.” It’s “exciting and nice for a while” if that’s up 30%, “but it’s not global across the whole beer business.” And off-prem sales during the World Cup stretch “were not particularly exciting. They were down.” That’s especially true for Boston Beer’s beer/malt portfolio which slipped ~12% by volume in Q2 scans including tuffer trends in Jun, per Circana data.Yet America’s 250th was “a big weekend for us” as well, and that fell more in Q3, while Sam Adams trends improved in recent periods, Jim called out. With Sun Cruiser still rockin’, Angry Orchard continuing to grow, Sinless and Lytt innovations just getting started, and oppy to improve Twisted’s trend vs easier comps, there is potential to “improve” this year. And “we are expecting our relative performance to improve” along with “some improvement in the category,” Diego stated. But if that’s not the case, and current trends stick, Boston is poised to finish toward the low-end of its volume guidance, down mid-single-digits.

Truly Mktg Missed the Mark, Driving SAM Budget Cut; Twisted Tea + Sun Cruiser Still Growin’; On-Prem Health Offset by Off-Prem

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